10/03/2011

As the financial squeeze on British egg producers continues, industry representatives say producers face a situation more problematic than that caused by Edwina Currie in the 1980s. Addressing a meeting of free range egg producers in Westmorland, Steve Carlyle of Country Fresh Pullets said, "These are difficult times. The industry has never had it so bad. I believe it is worse than Edwina... We have got very high feed prices combined with oversupply of egg production." image expired

In 1988 Mrs Currie caused huge damage to the egg industry when, as a government Health Minister, she said that most of Britain’s egg production was infected with the salmonella bacteria. Although it took years after Mrs Currie’s comments for British Lion to restore the reputation of the industry, Steve Carlyle believes the difficulties producers currently face are more serious still.

Huge increases in feed prices have hit the industry at a time when producer prices have been cut due to an excess of eggs on the market. The latest BFREPA (British Free Range Egg Producers Association) costings indicate that free range egg producers are currently losing £5.82 on every bird, with organic producers losing £6.08 per bird.

NEMAL warns of further reductions

Despite the desperate situation in which producers have found themselves NEMAL (National Egg Marketing Association Ltd), the organisation that represents 80 per cent of Lion packers, told BFREPA last week that that there will be no increase in farm-gate egg prices. This blow, delivered on 3^rd March, came just days after news that two major packers would be cutting prices; Oakland and Stonegate both cut prices paid for standard free range by five pence on 22^nd February this year. NEMAL also warned that its members were looking to cut costs further still because of oversupply in the egg market.

Many at the meeting in Westmorland complained that price cuts are being made despite the fact that the price of eggs has been increasing in supermarkets. In an attempt to redress the developing imbalance BFREPA chair John Retson has, along with NFU Poultry Board chair Charles Bourns, written to supermarkets calling for long term commitment to the supply chain.

Mr Retson told Farming Online, “While this isn’t a crisis, preparations for a change in legislation for 2012 have resulted in over production; this has come at a time when raw material prices have put pressure on producers. Rising feed costs have added 20p per dozen eggs onto production costs.”

Retson explained that he could foresee a difficult year for UK producers, with no end to the squeeze in sight, saying, “Feed prices remain high due to high futures and Defra figures show that chick placings for January are still high. It looks like production prices will continue to be high for the rest of the year.”

Lack of compliance with EU directive causes further worries

Another issue raised during the free range producers’ meeting was the forthcoming ban on conventional cages in the European Union. Whilst the UK has prepared for the change, some 30% of the EU flock may well be ’illegal’ when the ban comes into force on January 1 next year and those in the industry have expressed concerns that if the ‘illegal’ hens continue to produce after the deadline their eggs could find their way into the UK and unfairly undercut British producers.

John Retson told those assembled at the meeting that the industry had gained the support of politicians in resisting attempts to have the ban’s introduction delayed, but if ’illegal’ eggs do continue to be produced after the new rules come into force the UK will seek a ban on imported eggs produced to lower welfare standards or the introduction of a separate code to clearly label them.